One of Sequence’s outstanding investors, in charge of the partner Royef Botha, sees the symptoms of another citizen in the group, one where complex investors will probably harm the most.
He sent a warning to x on Thursday, writing, “SPVs are being stopped with the old mistakes.
That last cycle ended badly. In 2022, the 2021 VC market was crashed. Fallout is still ongoing, 2025 is expected to be another cruel year of the first failed.
The Boda is specifically warning about the Special Purpose (SPVs) – a building that allows the first investor to sell access to the Chunk of their shares. But new investors are not actually buying stocks earlier; They buy SPV shares, usually at the highest rising numbers. That means the startup price will have to be up just to other SPV portal owners to break.
The SPVs are usually very common in investing, where other startsups increase astronomy statistics. SEC size searches receive at least nine SPVs tied to anthropic since 2024. The company is reported that in the process of lifting another $ 3.5 billion.
Ai drawing was known for $ 1.5 billion reported and full of SPVs, with information. Note that no Sequence’s portfolio company.
This practice is not limited to just a few of the company. Almost every major number of billions of AI have investors who give SPVs. And if VC has the name of the VC Firm – Say, Archring Archrival Andreessen Horowitz – leading a covenant, that name can attract the consumers.
One person involved in school markets will keep the following deals: “They pass through all the feasts that can not find good, ‘even if these are the worst companies that can raise money to traditional VCs.”
The message of Babotha for investors? “Don’t buy it.”
Sequoia did not immediately respond to the replying request.
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